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The Nielsen Media Television Ratings and the Pulse of U.S. Boxing...
by John Chavez
Dec 15, 2010 -
The boxing industry in the United States of America is largely controlled by the premium cable network HBO.
They generate an annual revenue in excess of $1.2 billion and have by far the deepest pockets within the industry to purchase the top-level championship events. When it comes to the dollars... HBO is Carlos Slim while Showtime plays the role of Donald Trump, and everyone else is Charlie Brown.
Unfortunately money cannot buy everything so there seem to be various issues lurking on the horizon that the number one premium cable channel faces going forward.
It's been publicly stated by parent company, Time Warner that HBO stands to lose roughly 1.5 million subscribers in 2010. Fierce competition amongst digital and cheaper alternatives such as Netflix afford consumers the ability to view many highly acclaimed films without the need for HBO. The largest satellite distributor in the U.S., DirecTV (18 million subscribers) is currently out of contract with the Time Warner subsidiary leading to a sharp cutback in the promotion of the network. Neither of these issues take into account the fact that premium cable is considered a monthly luxury item in most households which directly clashes with the sustained, elevated unemployment rate facing millions of Americans across the country.
Nevertheless, being that the Home Box Office network still retains over 27 million monthly subscribers, it's still in a great position to continue generating strong revenue streams from it's domestic subscriber base as well as it's international outlets.
Now to the boxing aspect of it all...
The Nielsen Media ratings is the system utilized to give a statistical estimate of roughly how many viewers tune into a live program on television. For advertising-based television programming such as ESPN, ratings are essential in order to warrant repeat programming. The stronger the ratings figure the larger the potential for high-dollar advertisers to jump on board picking up advertisement spots. The lower the ratings figure the more likely the program gets canceled due to a lack of interested advertisers.
Simple enough.
When it comes to premium cable networks, ratings don't pose the same type of live-and-die sentiments as their regular cable counterparts.
For premium networks such as HBO and Showtime, Nielsen ratings provide a grade for the broadcast as to how compelling their product is and if the network was able to provide sufficient build-up in order to make it must-see live television.
The following figure is the rating for HBO's most recent boxing broadcast featuring Amir Khan vs. Marcos Maidana & Victor Ortiz vs. Lamont Peterson:
December 11, 2010 - HBO Victor Ortiz-Lamont Peterson – 745,000 viewers
December 11, 2010 - HBO - 8:00 PST - Amir Khan - Marcos Maidana – 1.17 million viewers
From the statistical figures provided by Nielsen Media Research, HBO's boxing programming has been struggling in recent years incomparison to that of years past.
The question inquisitive minds would like to ask is simply... why?
It's a complicated answer that I am certainly neither qualified nor intelligent enough to answer.
However, even the most ignorant fool can speculate and speculate I will.
Here are my assumptions for the down-trend in HBO Boxing Ratings.
--
1. True blue-collar boxing fans suffering from financial constraints of the economy being forced to cancel their HBO subscription. A rather fundamental and obvious assumption.
2. The Pay-Per-View effect. This points to the fact that from 2005 until recently, an over abundance of HBO produced Pay-Per-View shows have taken place which showcased the current generation of HBO fighters leading them to being under-exposed to a larger audience for several years. (The complete total is 34 HBO produced PPVs from 2005 to 2008.) We must remember that all undercard fights of Pay-Per-View events are never replayed on HBO and are largely overlooked as mainstream fans focus on the main event.
Example: Miguel Cotto vs. Antonio Margarito generated 500,000 Pay-Per-View buys in 2008 which was a very good number. However, even with this strong buyrate, it under exposed the undercard fighters incomparison to what they would have garnered during a BAD or WCB broadcast which generally range around the one million viewer mark. Does anybody remember Mike Alvarado or Bernabe Concepcion fighting on Pacquiao-Margarito undercard? One can only imagine the under-exposure of fighters on cards that generated far less buys then Cotto-Margarito.
3. Lack of mainstream media coverage. It is not financially worth the expenditure to send columnists to casino-based venues which include travel and hotel costs not associated with covering local maintstream sporting events that actually garners readership.
4. Lack of true marketing by boxing promoters. It appears to me that after a boxing promoter receives their television money, casino site fee, and sponsorship subsidization (or a contract for them)... the majority of marketing for prize fights comes in the form of conference calls, press conferences, and press releases sent to hardcore boxing websites. There are no innovative measures being utilized to market these events beyond the several hundred thousand hardcore boxing fans living in America. This is an aspect that rival combat sport, UFC has done a very impressive job of NOT emulating. They actually utilize innovative methods of marketing while consistently looking for improved methods to distribute and market the product. For those that look at fighter pay as the only excuse that the UFC is thriving over boxing... check again. Outside of Pacquiao and Mayweather, many of the UFC payroll fighters earn comparable figures to their boxing counterparts all the while generating real, unsubsidized revenue. While boxing's payscale is going down... the UFC's is steadily creeping up.
And for the record... I've never seen Pacquiao or Mayweather directly invest a large percentage of their earnings into improving and growing their own sport. I have yet to see Floyd Mayweather Jr. purchase billboard advertisements marketing a Sergio Martinez fight or Manny Pacquiao buying 2-page ads in USA today for a Juan Manuel Marquez bout. So in essence, it is not only irrelevant but pointless in stating Manny and Floyd's pay stubs as beneficial in favor of boxing. If the UFC generates a large-sized profit in the aftermath of an event, I can guarantee you that they'll be looking to invest a nice amount back into the branding of their business. Are you catching my drift?
5. Casino-based prize fights. The two prior speculations... the lack of mainstream media and the lack of true marketing correlate with the current business model amongst major boxing promoters. In 99.93 percent of instances... a casino decides to pay a site fee to a boxing promoter in order to host the show. Once this occurs, it is up to the casino, not the promoter, to sell or give away tickets in order to generate a profit on their investment. My co-host Ricardo Lois of The Boxing Truth Radio asked a very pertinent question regarding this scenario on this past week's show asking, "What is the breaking point where a casino actually loses money on their investment?" Casinos generally exude more revenue streams than any other venue due to the hotel accommodations, alcohol sales, venue concessions, dining establishments, gambling... in addition to ticket sales.
An example would be if the Mandalay Bay in Las Vegas shelled out a site fee of $500,000 in order to host the recent battle between Amir Khan-Marcos Maidana. According to CEO of Golden Boy Promotions, Richard Schaefer a paid live gate of roughly $500,000 was generated by the event. Most sideline analysts would deem this as a break even event for the MGM Mirage property but in reality the hotel must have made a decent enough profit on the total drop for the weekend.
6. A fear of the internet. It's a generational gap in some instances and pure ignorance in others. Due to the political nature of the U.S. boxing landscape, it affords for ineptness to thrive in spots incomparison to other industries in which the best innovators and executers thrive while the dunces fall by the wayside. It's time that the industry catches up to speed with and starts to realize the power of professional content ownership, global distribution, and proper monetization of the product.
--
(The number one rated internet boxing radio show on Itunes, "The Boxing Truth Radio" takes place every Sunday at 6 p.m. PST/9 p.m. EST. It features myself and the best host in the business Ricardo Lois. We enjoy talking about the ins and outs of the sport with boxing fans across the globe. Our call-in number is 562-219-3603 and you can reach us via our Twitter and Facebook accounts.)
These are my very misinformed speculations as to why the ratings at HBO are continuing to slide as each year progresses.
Here are the 2009 and 2010 year averages for HBO boxing programming (non-Pay-Per-View Events):
by John Chavez
Dec 15, 2010 -
The boxing industry in the United States of America is largely controlled by the premium cable network HBO.
They generate an annual revenue in excess of $1.2 billion and have by far the deepest pockets within the industry to purchase the top-level championship events. When it comes to the dollars... HBO is Carlos Slim while Showtime plays the role of Donald Trump, and everyone else is Charlie Brown.
Unfortunately money cannot buy everything so there seem to be various issues lurking on the horizon that the number one premium cable channel faces going forward.
It's been publicly stated by parent company, Time Warner that HBO stands to lose roughly 1.5 million subscribers in 2010. Fierce competition amongst digital and cheaper alternatives such as Netflix afford consumers the ability to view many highly acclaimed films without the need for HBO. The largest satellite distributor in the U.S., DirecTV (18 million subscribers) is currently out of contract with the Time Warner subsidiary leading to a sharp cutback in the promotion of the network. Neither of these issues take into account the fact that premium cable is considered a monthly luxury item in most households which directly clashes with the sustained, elevated unemployment rate facing millions of Americans across the country.
Nevertheless, being that the Home Box Office network still retains over 27 million monthly subscribers, it's still in a great position to continue generating strong revenue streams from it's domestic subscriber base as well as it's international outlets.
Now to the boxing aspect of it all...
The Nielsen Media ratings is the system utilized to give a statistical estimate of roughly how many viewers tune into a live program on television. For advertising-based television programming such as ESPN, ratings are essential in order to warrant repeat programming. The stronger the ratings figure the larger the potential for high-dollar advertisers to jump on board picking up advertisement spots. The lower the ratings figure the more likely the program gets canceled due to a lack of interested advertisers.
Simple enough.
When it comes to premium cable networks, ratings don't pose the same type of live-and-die sentiments as their regular cable counterparts.
For premium networks such as HBO and Showtime, Nielsen ratings provide a grade for the broadcast as to how compelling their product is and if the network was able to provide sufficient build-up in order to make it must-see live television.
The following figure is the rating for HBO's most recent boxing broadcast featuring Amir Khan vs. Marcos Maidana & Victor Ortiz vs. Lamont Peterson:
December 11, 2010 - HBO Victor Ortiz-Lamont Peterson – 745,000 viewers
December 11, 2010 - HBO - 8:00 PST - Amir Khan - Marcos Maidana – 1.17 million viewers
From the statistical figures provided by Nielsen Media Research, HBO's boxing programming has been struggling in recent years incomparison to that of years past.
The question inquisitive minds would like to ask is simply... why?
It's a complicated answer that I am certainly neither qualified nor intelligent enough to answer.
However, even the most ignorant fool can speculate and speculate I will.
Here are my assumptions for the down-trend in HBO Boxing Ratings.
--
1. True blue-collar boxing fans suffering from financial constraints of the economy being forced to cancel their HBO subscription. A rather fundamental and obvious assumption.
2. The Pay-Per-View effect. This points to the fact that from 2005 until recently, an over abundance of HBO produced Pay-Per-View shows have taken place which showcased the current generation of HBO fighters leading them to being under-exposed to a larger audience for several years. (The complete total is 34 HBO produced PPVs from 2005 to 2008.) We must remember that all undercard fights of Pay-Per-View events are never replayed on HBO and are largely overlooked as mainstream fans focus on the main event.
Example: Miguel Cotto vs. Antonio Margarito generated 500,000 Pay-Per-View buys in 2008 which was a very good number. However, even with this strong buyrate, it under exposed the undercard fighters incomparison to what they would have garnered during a BAD or WCB broadcast which generally range around the one million viewer mark. Does anybody remember Mike Alvarado or Bernabe Concepcion fighting on Pacquiao-Margarito undercard? One can only imagine the under-exposure of fighters on cards that generated far less buys then Cotto-Margarito.
3. Lack of mainstream media coverage. It is not financially worth the expenditure to send columnists to casino-based venues which include travel and hotel costs not associated with covering local maintstream sporting events that actually garners readership.
4. Lack of true marketing by boxing promoters. It appears to me that after a boxing promoter receives their television money, casino site fee, and sponsorship subsidization (or a contract for them)... the majority of marketing for prize fights comes in the form of conference calls, press conferences, and press releases sent to hardcore boxing websites. There are no innovative measures being utilized to market these events beyond the several hundred thousand hardcore boxing fans living in America. This is an aspect that rival combat sport, UFC has done a very impressive job of NOT emulating. They actually utilize innovative methods of marketing while consistently looking for improved methods to distribute and market the product. For those that look at fighter pay as the only excuse that the UFC is thriving over boxing... check again. Outside of Pacquiao and Mayweather, many of the UFC payroll fighters earn comparable figures to their boxing counterparts all the while generating real, unsubsidized revenue. While boxing's payscale is going down... the UFC's is steadily creeping up.
And for the record... I've never seen Pacquiao or Mayweather directly invest a large percentage of their earnings into improving and growing their own sport. I have yet to see Floyd Mayweather Jr. purchase billboard advertisements marketing a Sergio Martinez fight or Manny Pacquiao buying 2-page ads in USA today for a Juan Manuel Marquez bout. So in essence, it is not only irrelevant but pointless in stating Manny and Floyd's pay stubs as beneficial in favor of boxing. If the UFC generates a large-sized profit in the aftermath of an event, I can guarantee you that they'll be looking to invest a nice amount back into the branding of their business. Are you catching my drift?
5. Casino-based prize fights. The two prior speculations... the lack of mainstream media and the lack of true marketing correlate with the current business model amongst major boxing promoters. In 99.93 percent of instances... a casino decides to pay a site fee to a boxing promoter in order to host the show. Once this occurs, it is up to the casino, not the promoter, to sell or give away tickets in order to generate a profit on their investment. My co-host Ricardo Lois of The Boxing Truth Radio asked a very pertinent question regarding this scenario on this past week's show asking, "What is the breaking point where a casino actually loses money on their investment?" Casinos generally exude more revenue streams than any other venue due to the hotel accommodations, alcohol sales, venue concessions, dining establishments, gambling... in addition to ticket sales.
An example would be if the Mandalay Bay in Las Vegas shelled out a site fee of $500,000 in order to host the recent battle between Amir Khan-Marcos Maidana. According to CEO of Golden Boy Promotions, Richard Schaefer a paid live gate of roughly $500,000 was generated by the event. Most sideline analysts would deem this as a break even event for the MGM Mirage property but in reality the hotel must have made a decent enough profit on the total drop for the weekend.
6. A fear of the internet. It's a generational gap in some instances and pure ignorance in others. Due to the political nature of the U.S. boxing landscape, it affords for ineptness to thrive in spots incomparison to other industries in which the best innovators and executers thrive while the dunces fall by the wayside. It's time that the industry catches up to speed with and starts to realize the power of professional content ownership, global distribution, and proper monetization of the product.
--
(The number one rated internet boxing radio show on Itunes, "The Boxing Truth Radio" takes place every Sunday at 6 p.m. PST/9 p.m. EST. It features myself and the best host in the business Ricardo Lois. We enjoy talking about the ins and outs of the sport with boxing fans across the globe. Our call-in number is 562-219-3603 and you can reach us via our Twitter and Facebook accounts.)
These are my very misinformed speculations as to why the ratings at HBO are continuing to slide as each year progresses.
Here are the 2009 and 2010 year averages for HBO boxing programming (non-Pay-Per-View Events):
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